Lawsuit Reform for Competitive State Economies

The publication focuses on fifteen key areas in which state legislators can craft meaningful reforms designed to make their state’s civil justice systems fairer, more predictable, and more conducive to a healthy and growing economy. With each of these fifteen issue areas, the publication identifies and describes specific problems of the civil justice system that many states may be facing, offers solutions in the form of ALEC model legislation that can be used as templates for any legislator to use, and provides background points to better understand and discuss these important reforms.

Why Lawsuit Reform is Important:

Voters demand it. A 2012 poll found that 89 percent of voters consider lawsuit abuse a problem and 83 percent think improvements need to be made to our lawsuit system.

Many medical malpractice cases are abusive.A 2006 study by researchers at the Harvard School of Public Health and Brigham and Women’s Hospital estimated that 37 percent of medical malpractice claims lack sufficient evidence of wrongdoing and are likely meritless.

Abusive medical malpractice cases are expensive. The same study found that the average expenses of litigating a case fall around $52,000. The fear of frivolous medical malpractice lawsuits has also lead to an explosion of the phenomenon of defensive medicine. PricewaterhouseCoopers estimated that the practice of defensive medicine increased health-care expenditures by 10 percent or $210 billion in 2006.

Reform would support a fair and productive economy. Lawsuit reform is essential for a healthy economy because it helps minimize frivolous litigation while fostering a fair and predictable business climate. In a 2008 survey, 67 percent of corporate general counsel said that a state’s legal system is likely to impact important business decisions, including where to do businesses.

Goals of Lawsuit Reform

Filtering out meritless cases:Helpful reforms will fairly and cautiously raise the standards for bringing lawsuits and lessen the incentives for bringing weakly supported cases. Filtering out such meritless cases before they get to trial will save significant money in unnecessary legal expenses.

Removing loopholes that promote excessive lawsuits: Reforms will also make the civil justice system fairer for all participants by strengthening or clarifying laws that have historically been abused.